Circular

PUBLIC NOTICE TO ALL CAPITAL MARKET OPERATORS ON FIDELITY BONDS

 

All Capital Market Operators (CMOs) and Consultants are hereby reminded that they are required to constantly maintain a valid Fidelity Bond/Professional Indemnity policy in strict compliance with Rule 27 of the Commission’s Rules and regulations (as amended May 14, 2012).

 

CMOs are further reminded that they are required to maintain a Fidelity Bond/ Professional Indemnity Policy that has a validity period from 1^st January to 31^st December of each year. Operators that have submitted bonds that will expire before December 31, 2016 should extend their policy to expire on 31^st December, 2016 and the validity period of 1^st January to 31^st December should be maintained subsequently.

 

Furthermore, in view of the recent compliance with the Minimum Capital Requirement by CMOs, Operators are directed to immediately ensure that the level of insurance cover is in line with the new minimum paid-up capital for their registered function(s)

 

All CMOs should adhere strictly to this policy as any fidelity bond which does not conform to this standard will not be acceptable to the Commission.

 

Please note that the Commission’s Rules do not provide any window period where CMOs could be permitted to operate without a valid fidelity bond and as such, operating in the Capital Market without a valid fidelity bond is a contravention of the Investment and Securities Act (ISA) No. 29, 2007 and the SEC Rules & Regulations pursuant to the Act, which is sanctionable accordingly.

 

The Commission wishes to reiterate that non-compliance with the minimum requirement for registration as a CMO is a violation of the (ISA) No. 29, 2007. Consequently, CMOs are advised to always ensure full compliance with all requirements that formed the bases of their registration.

 

 

Signed:

Management

11^th November, 2015